March 2010 Issue

In celebration of World Water Day on March 22nd, the Journal of Energy Security is launching a series of articles on the nexus between energy and water. There is a symbiotic relationship that is at work here—according to sources we’ve accessed, which include Scandia National Laboratories in Albuquerque, New Mexico, Pacific National Laboratories in Washington State, and the Stockholm International Water Institute (SIWI) in Stockholm, Sweden, among others. Jakob Granit from SIWI makes his first contribution to the JES, providing the suggestion that cooperative measures in the energy sector, through energy pooling, may be an applicable model to facilitate the development of needed global water resources on a region-by-region basis. In May, the JES will spotlight a water contribution from Steven Solomon drawing on research from his new book, Water: The Epic Struggle for Wealth, Power and Civilization.

Cooperation is a key word in determining the future energy security of European nations, particularly for those scattered across Central and Eastern Europe. While Russia steams ahead with its Nord Stream project, it has picked up a key ally in France’s GDF (Gaz de France) while the Visegrad nations (Czech Republic, Hungary, Bulgaria, Poland and Slovakia) seek to press forward in diversifying gas resources away from Russian-origin gas. In March these nations (and a handful of others including Austria, Bosnia and Herzegovina, Romania, Slovenia and Bulgaria) called for greater EU cohesion and structural funding for enhanced and diversified energy flow, primarily LNG through the Black Sea and Mediterranean. These movements, combined with Russian fears of a ‘gas glut’, lead this past month to a rethink of Russia’s own gas production development strategy. Already the huge Stockmann gas field project has been put at least on temporary hold, and, interestingly, Russia’s Gazprom inaugurated its first coal-bed methane plant this past month. Clearly movement is afoot in global gas markets, and one well worth watching—particularly for gas import dependent states.

Heading south from Russia through the CIS from Turkmenistan to Afghanistan and beyond are the potential implications of the construction and development of the Turkmen-Afghan-Pakistan-India (TAPI) pipeline. While the development of such a transnational pipeline would bring treasure to the government of Afghanistan as a major transit state for this gas pipeline, it has direct and immediate security implications for ISAF troops already stationed in the country. John Foster, a long-standing industry professional who has served with the World Bank, gives us his perspective on TAPI development and what it means for all the stakeholders.

Notwithstanding the geopolitics of energy, contributors Andreas Goldthau and Jan Martin Witte share their research, insight and perspective on how global energy markets, and in particular how the anemic producer-consumer dialogue, might be enhanced through governance mechanisms. In a wide ranging discussion, from the applicability of the methodology that underlies the WTO to financial market stabilization, the authors contend that while energy will remain political, a global governance approach towards problem resolution provides a new analytical perspective on viewing energy trade and resource development in a different, non zero-sum light.

Finally, tensions are heating up in the Britain's Falkland Islands with the arrival of an off-shore oil rig to explore for oil in off-shore Falklands’ waters. This has raised the ire of the Argentine government, which has called on the United Nation’s Secretary General and US Secretary of State Hilary Clinton to intervene. Whether the UK considers this a dispute is an altogether different question. What is increasingly clear is that where energy and politics mix there is no neat way to sort out the wheat from the chaff; understanding the energy security dilemmas of our time requires boring down into the details. This is what the JES is all about.

Over the past few years, China has come under increasing scrutiny and criticism over its monopoly of the rare earth industry and for gradually reducing export quotas of these resources. However, China is faced with its own internal issues that, if not addressed, could soon stress the country's rare earth industry. This paper by Cindy Hurst is designed to give the reader a better understanding of what rare earth elements are and their importance to society in general and to U.S. defense and energy policy in particular. It also explores the history of rare earth elements and China's current monopoly of the industry, including possible repercussions and strategic implications if rare earth elements supply were to be disrupted. Click to access full report.

18th century British scholar Thomas Fuller wrote, "No one knows the worth of water until the well is dry." It would be hard to exaggerate the poignancy of this quote in present-day terms. Water demand over the past 100 years has vastly outstripped population growth. At the same time the amount of water available on the planet has never changed a drop but its demand use has. There is a tight nexus between water and energy. Clean water cannot be produced without energy, and 99% of global energy production requires water at some stage of development. In the first of a series of articles which will run in 2010 in the Journal of Energy Security, Jakob Granit of the Stockholm International Water Institute outlines the nexus between water and energy and the pressing need for intensified cooperation between the sectors.

Network interdependencies are hard for system operators to understand. They are even harder to visualize. This is why cyber-terrorism and cyber-terrorists are working hard to undermine the various programs and protocols that protect these critical infrastructure networks such as electricity grids, oil and gas distribution networks, water and water distribution systems, et al. Thus far we haven't witnessed a successful cyber-attack that has cascaded across multiple networks. Understanding network interdependencies is the first line of defense in the protection of these systems.

Competing interest groups in the United Kingdom give a first impression of a nation tied and quartered by incongruent interests. Yet within the past eight months, the British government has released its National Security Strategy of the United Kingdom, and the UK Task Force on Peak Oil and Energy Security and the London-based Economic Policy Centre have issued reports which fundamentally address UK energy security with passion and conviction. Clearly, these groups and many others want what's best for the country. David Cole of the Atlantic Council of the United Kingdom explores how to bring UK energy security stakeholders together and on what issues they may agree.

Adopting a governance-based approach towards building stability, reliability and transparency in international energy markets is building momentum. Contributors Andreas Goldthau and Jan Martin Witte focus on how markets and institutions that govern these markets can be structured to provide a ‘win-win’ situation for both energy producers and consumers. Global energy governance they argue, goes beyond a ‘zero-sum’ approach in assessing who is winning and losing in energy and provides a multi-dimensional approach for the assessment of how the divergent needs of individual players can contribute to greater cooperation.

An ancient silk road-route linking Central Asia to India may be the home of a new and dramatic pipeline that would deliver Turkmen gas across the rugged and troubled Afghan interior to India. Scheduled to begin construction in 2010, the TAPI pipeline could generate significant transit revenue to the Afghan government for domestic development needs. Yet any project of this magnitude, nearly 1,000 miles in length, is bound to face multiple challenges to its security and construction. The TAPI is rich in this regard.

The arrival of a British oil rig in the territorial waters off the Falkland Islands has again ignited rancor between the UK and Argentinean governments. The islands, which lie 400 miles off Argentina’s southern coast, are believed to hold untapped reserves of oil, but how much oil no one knows. Argentina has appealed to the Secretary General of the United Nations and to US Secretary of State Hilary Clinton to intervene in the dispute in an effort to drive forward a solution before it devolves further.

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